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On the Cost Competitiveness of Blue and Green Hydrogen


Despite huge cost reduction potential for green hydrogen production, it is uncertain when cost parity with blue hydrogen will be achieved. While technology costs, electricity and natural gas prices are key drivers, hydrogen’s competitiveness will be increasingly determined by carbon costs or regulation associated with its life-cycle emissions. Theoretically and numerically we show that higher residual emissions of blue hydrogen can close its competitive window much earlier than cost parity of green hydrogen would imply. In regions where natural gas prices will remain substantially higher (~40 EUR/MWh) than before the energy crisis, such a window is narrow or may have closed already. Blue hydrogen could play a role in bridging the scarcity of green hydrogen, yet uncertainties about the beginning and end of blue hydrogen competitiveness might impede investments. By contrast, in regions where natural gas prices fall below 15 €/MWh, blue hydrogen can remain competitive until ~2040, if it is produced with high CO2 capture rates (>90%) and low methane leakage rates (


Academic article





  • Potsdam Institute for Climate Impact Research
  • Norwegian University of Science and Technology
  • SINTEF Energy Research / Gassteknologi
  • Paul Scherrer Institute
  • The Australian National University
  • Macquarie University



Published in

SSRN Electronic Journal


1 - 39

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